Real Estate ownership insurance, generally known as title insurance, is an insured statement of the condition of your "title" or ownership of a particular piece of property. It provides you, as the property owner, with peace of mind by protecting against certain existing title problems. A title policy guarantees that the home you purchase is free of liens, clouds against the title, or confusion in the prior ownership as to the date and time the policy is issued.

While there should be no risks in transferring property, risks do exist. Many "hidden" hazards to property ownership may show up unexpectedly in connection with your property. Any one of them could mean a costly loss or require time. Title insurance can help eliminate these risks. It protects you from damages and expenses incurred because of possible title defects such as: confusion from similarity of names, forged documents, signatures of minors or mentally incompetent persons, mistakes in recording legal documents, undisclosed or missing heirs, fraud, invalid divorces, misrepresentation of marital status, unpaid taxes, clerical errors in public records, or wills not probated.

Before a policy is issued, the title company conducts a search of public records, maps and documents concerning the real property in question. Once the facts about the property and people affecting ownership are collected, examined and interpreted, the company issues a title policy insuring the condition of title. When a title insurance company issues your policy it is saying that you be assured that your property is protected by their policy subject only to its terms. If a flaw in title should be discovered, the title company should defend the title as insured at its own expense and should correct or clear the title, or should pay any loss incurred.

A one-time only premium covers the entire cost so long as ownership remains in your name or that of your heirs. The policy is issued in an amount equal to the purchase price of the property. Of course, the greater the coverage given under a policy, the higher the premium charged.

Protection of your property ultimately rests in the financial stability, professional integrity and responsible management of the title insurance company that you request to insure your property. Protect yourself against loss due to title defects by insisting on an owner's title insurance policy.

Honolulu Board of REALTORS® 1136 12th Avenue, Suite 200 Honolulu, Hawaii 96816
Phone: (808) 732-3000